According to charting platform TradingView, Bitcoin (BTC) rose 9.5% on Wednesday, posting its largest daily percentage gain since October 23.
Prices rose to $64,000 on several exchanges, reaching their highest level since November 2021. The parabolic move from Monday's low of nearly $51,500 was largely attributed to Wall Street's acceptance of spot-based Bitcoin ETFs. The CoinDesk 20 Index, the broader market indicator, is up over 10% this week.
The consensus is that the rally will continue in the coming months and push prices into six figures.
“Our analysis predicts a conservative price target of $100,000 to $120,000 to be achieved by the fourth quarter of 2024 and the peak of the cycle, as measured by total crypto market cap, sometime in 2025,” said analysts at Crypto Exchange Bitfinex.
“The ETFs have introduced 'passive demand', meaning the demand comes from investors who are largely independent of price. “They view Bitcoin as a store of value rather than a tradable, volatile asset, which was the case for several years before the ETFs were introduced,” analysts added.
Earlier this week, technical analysis expert Peter Brandt said that Bitcoin could reach a peak of $200,000 by September 2025.
These predictions are sure to please directional traders. Nonetheless, untargeted traders need not feel left out, as cash-and-carry arbitrage now yields three times more than the yield on the 10-year U.S. Treasury note, the so-called risk-free rate.
Cash and carry arbitrage is a market-neutral strategy that aims to profit from price differences in the spot and futures markets. The arbitrageur combines a long spot market position with a short futures position when futures trade at a premium to spot prices. As futures expiration approaches, the premium evaporates and on settlement day, futures converge with spot prices, providing the arbitrageur with a relatively risk-free return.
According to blockchain analytics firm Glassnode, the Bitcoin cash-and-carry strategy returns over 14% using three-month futures. That's more than three times the 10-year Treasury yield of 4.27% and 2.8 times the 1-year Treasury yield of 5%.
The relatively higher return could attract more money into the crypto market.
“The yields available in futures markets are likely to attract market makers back into the digital asset space and increase market liquidity,” Glassnode said in the weekly newsletter.